Italy Fiscal


Italy approves constitutional amendment to enforce balanced budget

On 18 April, the government approved the economic plan for 2012. The document revises budget deficit projections for the next four years. While the austerity plan launched by the Monti administration in November envisaged an almost balanced budget by 2013, the current document delays that goal by one year, with the budget deficit expected to reach 0.1% of GDP in 2014. A fully balanced fiscal position is expected to be achieved only in 2015. For this year, the government forecasts a deficit of 1.7%, which is seen to decline to 0.5% of GDP in 2013. In the same document, the government revised its growth assumptions and currently expects the economy to contract 1.2% this year, down from an earlier projection of a 0.4% contraction. Economic authorities left their projections for next year unchanged, when the economy is expected to expand 0.3%. On the same day, the Senate approved a constitutional amendment which will force governments to run balanced budgets from 2014 onwards. The proposal to amend the Constitution was tabled by the former Berlusconi administration last year and was backed by the Monti government, which took office in November. The amendment requires the government to maintain the balance between revenues and expenditure, taking into consideration adverse and positive phases of the economic cycle. Governments will need parliamentary authorization in order to run a deficit and will be able to do so only under exceptional circumstances. An independent parliamentary commission will also be instituted in order to monitor the developments of the state budget.

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Italy Economic News

  • Italy: Annual variation in consumer prices turns positive in September

    October 14, 2016

    According to revised data released by the Italian Statistical Institute (ISTAT), consumer prices fell 0.2% from the previous month in September.

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  • Italy: Industrial production rebounds strongly in August

    October 10, 2016

    In August, industrial output increased 1.7% from the previous month, accelerating from July’s revised 0.7% increase (previously reported: +0.4% month-on-month).

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  • Italy: PMI returns to expansion in September

    October 3, 2016

    The IHS Markit manufacturing Purchasing Managers’ Index (PMI) rose from 49.8 in August to 51.0 in September, taking it above the 50-threshold that separates expansion from contraction in the manufacturing sector. September’s result mainly reflected a return to growth in new orders, which, in the previous month, had dropped slightly for the first time in over one-and-a-half years.

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  • Italy: Annual variation in consumer prices turns positive in September

    September 30, 2016

    According to provisional data released by the Italian Statistical Institute (ISTAT), consumer prices fell 0.2% over the previous month in September, contrasting August’s 0.2% increase and marking the lowest result in seven months.

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  • Italy: Business confidence rebounds in September

    September 28, 2016

    The National Institute of Statistics’ (Istat) composite business confidence indicator (IESE, Istat Economic Sentiment Indicator), which covers the manufacturing, construction, service and retail sectors, increased from a revised 99.5 in August (previously reported: 99.4) to 101.0 in September. All four categories of the indicator improved compared to August.

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